• GBP/USD lacks any firm intraday directional bias and oscillates in a narrow range on Monday.
• Geopolitical uncertainties and hawkish Fed expectations underpin the USD, capping spot prices.
• The technical setup, too, warrants some caution before positioning for any meaningful upside.

The GBP/USD pair struggles to capitalize on its goodish recovery from a one-and-a-half-week low, touched last Thursday, and oscillates in a narrow range around mid-1.3400s at the start of a new week. The US Dollar (USD) regains some positive traction amid the uncertainty over a potential US-Iran peace deal and hawkish US Federal Reserve (Fed) bets. This, in turn, is seen as a key factor acting as a headwind for spot prices.

The British Pound (GBP), on the other hand, is undermined by expectations for a delayed rate hike from the Bank of England (BoE), especially after softer inflation figures and an unexpected rise in the Unemployment Rate. Traders, however, opt to wait for this week's important US macro releases and BoE Governor Andrew Bailey's appearances before positioning for the next leg of a directional move for the GBP/USD pair.

From a technical perspective, spot prices hold a capped tone below the 200-period Simple Moving Average (SMA) on the 4-hour chart, which should continue to act as overhead supply. However, the rising trend-line support around 1.3356 underpins the broader advance. Meanwhile, momentum indicators are mildly constructive, yet signaling at stabilizing downside pressure rather than a decisive bullish shift for the GBP/USD pair.

In fact, the Relative Strength Index (RSI) is hovering above the 50 line, while the Moving Average Convergence Divergence (MACD) is marginally positive. This, in turn, suggests that any subsequent move up is more likely to confront stiff resistance near the 1.3500 psychological mark (200-period SMA). A sustained move above this barrier would be needed to reopen the path toward higher highs.

On the downside, the next notable support aligns with the prior uptrend support line around 1.3356, where buyers would be expected to emerge on a deeper pullback. A convincing break below that zone would suggest a more meaningful deterioration of the medium-term bullish structure.

(The technical analysis of this story was written with the help of an AI tool.)

GBP/USD 4-hour chart